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Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August:

1	Sales (33,000 units)		$8,250,000.00
2	Production costs (40,500 units):
3	Direct materials	$3,240,000.00
4	Direct labor	1,822,500.00
5	Variable factory overhead	1,012,500.00
6	Fixed factory overhead	607,500.00	6,682,500.00
7	Selling and administrative expenses:
8	Variable selling and administrative expenses	$1,160,000.00
9	Fixed selling and administrative expenses	230,000.00	1,390,000.00

	Required:
a.	Prepare an income statement according to the absorption costing concept.*
b.	Prepare an income statement according to the variable costing concept.*
c.	What is the reason for the difference in the amount of income from operations reported in (a) and (b)? * Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. Enter all amounts as positive numbers.

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